The primary goal and responsibility of everyone in aviation is safety. When we apply that philosophy to a mechanical device, we're talking about reliability. Unlike some other types of powered vehicles, the goal of the aircraft engine designer, manufacturer, mechanics, and end users is not to maximize power and performance, but to maximize reliability.
Unlike other types of engines that are pushed to their performance limits, aircraft engines are sized to be capable of doing their intended job. That's why a 520- or 540-cubic-inch aircraft engine may only develop 250 horsepower, although a much smaller automobile engine develops the same or greater power levels.
Aircraft engine manufacturers give each of their products a recommended time between overhauls (TBO). In most general aviation applications, this overhaul interval is a recommendation only and is not mandatory by regulation. The engine is inspected, repaired as necessary, and returned to service based on whether it meets maintenance and performance requirements.
The manufacturer's recommended TBO is based on the FAA definition of "time in service" as "the time from the moment an aircraft leaves the surface of the earth until it touches it at the next point of landing" (Federal Aviation Regulation Part 1). Time in service, or "maintenance time," is not the same as the more familiar pilot (or flight) time, which is calculated from the time an aircraft moves under its own power to the time it comes to rest after landing.
Many aircraft, especially rental aircraft, have two hour meters (although you will probably see only one). Most pilots are familiar with the Hobbs meter, which is turned on and off by an oil-pressure switch or the master switch, depending on the airplane. Pilots use this meter to count their flight time and pay their rental fee.
A squat switch, which is generally located on a main landing gear leg, activates the second hour meter. This hour meter runs when it senses that there's no weight on the landing gear, then accurately records maintenance time, which is used for inspections, scheduled maintenance, and tracking engine, prop, and accessory time.
If an aircraft doesn't have this timer, it usually has an hour meter built into the tachometer (the aircraft may have both). This meter is designed to function accurately only within the rpm range of the engine at cruise power, so it will read low whenever the engine runs slower than cruise rpm.
A tach hour meter generally records time between the Hobbs and the squat switch-controlled hour meter, and it's perfectly legal to use the time any of them record for "maintenance time." Regardless of the method used to record time, when it's time to overhaul an aircraft engine, either because it has reached its TBO or because its mechanical health warrants it, the owner has three options - a new engine, a rebuilt (remanufactured) engine, or overhauling the installed engine.
A factory new engine is always an alternative, but it's the most expensive option by far. There is little operational difference between a rebuilt and an overhauled engine, but there is a definite legal difference. This difference influences the cost of the rebuilt engine, and it can increase the aircraft's value, although probably not in proportion to the cost of the engine.
To understand the difference between a rebuilt and overhauled engine, it's important to not confuse the much broader term maintenance with the much narrower term overhaul. FAR Part 1 defines maintenance as "inspection, overhaul, repair, preservation, and the replacement of parts..." The term includes overhaul but certainly is not limited to it, nor does it assume that any maintenance function is an overhaul. An overhaul is a specific maintenance function that must be conducted and the records completed to indicate specifically that an overhaul has been accomplished.
FAR Part 43 defines the difference between a rebuilt and an overhauled engine, and FAR Part 91 defines who the FAA authorizes to rebuild an engine.
FAR Part 43.2(a) says an overhauled product has been "disassembled, cleaned, inspected, repaired as necessary, and reassembled ... and tested in accordance with approved standards and technical data ... acceptable to the Administrator which have been developed and documented by the holder of the type certificate ...".
FAR Part 43.2 (b) says a rebuilt product as one that has been "disassembled, cleaned, inspected, repaired as necessary, reassembled, and tested to the same tolerances and limits as a new item ... ".
The italicized phrase is the reason why only the manufacturer, or an agency approved by the manufacturer, can rebuild an engine. Generally, the new tolerance and limit data required to rebuild an engine aren't available to the public. The overhaul manuals manufacturers supply to the industry contain overhaul limits and not rebuild limits.
FAR Part 91.421(a) says "the owner or operator may use a new maintenance record, without previous operating history, for an aircraft engine rebuilt by the manufacturer, or by an agency approved by the manufacturer."
"A new maintenance record, without previous operating history" is FAA jargon for what most of us call a "zero-time" logbook. In other words, a rebuilt engine starts anew with a clean sheet of paper. An overhauled engine continues the story of its life in the same logbook it was born with.
Only the manufacturer, or a facility it approves, can rebuild an engine. Representatives of Lycoming and Continental have both told me that no facilities are currently authorized to rebuild engines outside their respective factories.
In a legal sense, there's no difference between a new and rebuilt engine. Both have "zero time" logbooks and are considered to be new engines for all regulatory purposes. But realistically, a rebuild may include original components that meet the "new engine" tolerances and limits, but like a new engine, it may also include a warranty.
In most cases, an FAA-certificated airframe and powerplant (A) technician can legally overhaul your piston aircraft engine and return it to service, providing it doesn't need any major repairs. FAR Part 43, Appendix A (b)(2), says a major engine repair is one of three things: (i) Separation or disassembly of a crankcase or crankshaft of a reciprocating engine equipped with an integral supercharger; (ii) Separation or disassembly of a crankcase or crankshaft of a reciprocating engine equipped with other than spur-type propeller reduction gearing; and (iii) Special repairs to structural engine parts by welding, plating, metalizing, or other methods.
Many small shops do excellent engine overhauls, especially on the relatively simple four- and six-cylinder carbureted engines. A more sophisticated fuel injected and/or supercharged or turbocharged engine will probably require the services of a larger shop with more equipment. Be aware that the quality of your overhaul depends entirely on the individuals who do the work, not on the shop's name. I have seen one-man shops do excellent engine overhauls, and seen mediocre overhauls come out of large, heavily advertised facilities. Do some homework and talk to people who have had their engine overhauled by the shop or shops you're considering.
One of the more difficult decisions an owner must make is when to replace, overhaul, or rebuild an engine that is running properly and passing all required inspections at its TBO time. You have several things to think about.
The manufacturer established your engine's TBO to ensure reliability and to provide reusable major components at overhaul time. Operating the engine beyond TBO may be false economy from several perspectives. The engine components you wear beyond the recommended overhaul time may cost you more than what you saved by not overhauling the engine at TBO.
Second, the engine's reliability may suffer if it's operated beyond TBO. Metal fatigue and small but growing cracks and other types of internal engine wear and damage (which do not show up on routine inspection procedures) may make themselves known in a catastrophic way. Finally, there may be serious and expensive legal considerations beyond the FARs in civil court for not following the engine manufacturer's maintenance recommendations.
Good maintenance can and will go a long way toward ensuring that your engine reaches TBO. Regular oil and filter changes, timing checks, spark plugs, air filters, and using the proper grade of fuel are extremely important to engine life and reliability.
Good flying skills such as proper engine warm up and cool down, proper management of rpm and manifold pressure, and avoiding rapid power changes, especially large power reductions at altitude, will help your engine reach its design life.